LEGISLATIVE BUDGET BOARD
Austin, Texas
 
FISCAL NOTE, 81ST LEGISLATIVE REGULAR SESSION
 
April 19, 2009

TO:
Honorable Rene Oliveira, Chair, House Committee on Ways & Means
 
FROM:
John S. O'Brien, Director, Legislative Budget Board
 
IN RE:
HB2762 by Martinez Fischer (Relating to exemptions from the sales tax for certain school supplies.), As Introduced



Estimated Two-year Net Impact to General Revenue Related Funds for HB2762, As Introduced: a negative impact of ($228,473,000) through the biennium ending August 31, 2011, if the effective date of the bill is July 1, 2009; or a negative impact of ($202,050,000) through the biennium ending August 31, 2011, if the effective date of the bill is October 1, 2009.



Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2009 ($8,610,000)
2010 ($108,126,000)
2011 ($111,737,000)
2012 ($115,326,000)
2013 ($118,978,000)
2014 ($122,827,000)




Fiscal Year Probable Net Positive/(Negative) Impact to General Revenue Related Funds
2010 ($90,313,000)
2011 ($111,737,000)
2012 ($115,326,000)
2013 ($118,978,000)
2014 ($122,827,000)




Fiscal Year Probable Revenue (Loss) from
General Revenue Fund
1 		Probable Revenue (Loss) from
Cities		 Probable Revenue (Loss) from
Transit Authorities		 Probable Revenue (Loss) from
Counties
2009 ($8,610,000) $0 $0 $0
2010 ($108,126,000) ($20,107,000) ($6,856,000) ($2,841,000)
2011 ($111,737,000) ($20,778,000) ($7,084,000) ($2,938,000)
2012 ($115,326,000) ($21,445,000) ($7,314,000) ($3,032,000)
2013 ($118,978,000) ($22,125,000) ($7,544,000) ($3,128,000)
2014 ($122,827,000) ($22,841,000) ($7,788,000) ($3,229,000)

The above table assumes an effective date of July 1, 2009.  The table below assumes an effective date of October 1, 2009.



Fiscal Year Probable Revenue Gain/(Loss) from
General Revenue Fund
1 		Probable Revenue Gain/(Loss) from
Cities		 Probable Revenue Gain/(Loss) from
Transit Authorities		 Probable Revenue Gain/(Loss) from
Counties
2010 ($90,313,000) ($15,139,000) ($5,163,000) ($2,140,000)
2011 ($111,737,000) ($20,778,000) ($7,084,000) ($2,938,000)
2012 ($115,326,000) ($21,445,000) ($7,314,000) ($3,032,000)
2013 ($118,978,000) ($22,125,000) ($7,544,000) ($3,128,000)
2014 ($122,827,000) ($22,841,000) ($7,788,000) ($3,229,000)

Fiscal Analysis

The bill would amend Chapter 151 of the Tax Code to create a sales tax exemption for specified school supplies including backpacks, regardless of when the supplies are purchased.

The bill would repeal Section 151.327 of the Tax Code, relating to an existing sales tax exemption for school backpacks before the start of school.

The bill would take effect July 1, 2009, assuming that it received the requisite two-thirds majority votes in both houses of the Legislature. Otherwise, it would take effect October 1, 2009.


Methodology

State sales tax collections from the sale of school supplies were estimated based on national data gathered from the U.S. Bureau of the Census. National sales were adjusted to reflect sales made in Texas; multiplied by the state sales tax rate; adjusted for potential effective dates for the bill of July 1, 2009, and October 1, 2009; and extrapolated through fiscal 2014.

Local Government Impact

There will be a proportional loss of sales tax revenue to units of local government.


Source Agencies:
304 Comptroller of Public Accounts
LBB Staff:
JOB, MN, SD, KK